The trend of price reduction has finally reached the high-end consumer goods industry.
In recent times, faced with the challenges of reduced consumer willingness and inventory backlog among mainstream customers, top brands still have the capacity to maintain their value, while second tier international high-end consumer brands have successively bowed to the “price war”.
According to data from renowned American investment bank Bernstein, international high-end consumer brands Burberry and YSL are trying to regain consumer favor by lowering prices.
Previously, Burberry increased the average price of its new bags by 58% compared to the old model in order to enhance its brand value. However, this move not only led to the loss of traditional customer groups, but also failed to replenish sales from a more affluent consumer group. According to Bernstein statistics, Burberry has recently lowered the price of its mid size Knight handbag by 22%, with an average price reduction of 5% for all bags designed by the brand’s creative director Daniel Lee since 2022.
The personnel changes announced by Burberry on July 15th show that former CEO Jonathan Akeroyd has “decided to resign on the basis of mutual agreement” and will be replaced by Joshua Schulman, who previously served as a senior executive at Coach. This appointment is seen as a signal for Burberry, which is struggling with growth and underperforming, to seek a turning point from the sinking market.
Burberry Chairman Gerry Murphy stated that the change in company executives does not represent a “fundamental change in strategy”. The brand will continue to deeply cultivate the high-end market in the future, refocus on the brand’s classic style, balance product supply, and develop towards an “everyday luxury” brand.
Saint Laurent, which belongs to the Kering Group, has also been caught up in the “price reduction trend”, lowering the pricing of most sizes of its best-selling Loulou bags in its US stores. According to Wayback Machine data, the price of a small bag that was priced at $2950 in January this year has dropped to $2650, but it is still significantly higher than the price of $2050 at the end of 2020.
The Saint Laurent brand has a low resale value, and the prices of bags, including classic models, have plummeted, making it a hot topic on social media. Some netizens have expressed that the price of the envelope they purchased for 9700 yuan a year ago has “decreased instead of increased” in July this year, reaching 8500 yuan, and there are many consumers who have had the same experience.
